b

3. Net present value method Consider the case of Sutherland Engineering: Sutherland Engineering is evaluating a proposed capital budgeting project that will require an initial investment of $172,000. The project is expected to generate the following net cash flows: Year Yeri Cash Flow $45.400 Year 2 $51.800 $48.900 Year Year 4 545,400 Assume the desired rate of return on a project of this type is 10%. What is the net present value of this project? (Note: Do not round your Intermediate calculations.) O 315,732.70 37,244.50 0 $10,120.21 O $26.719.70 Assume the desired rate of return on a project of this type is 10%. What is the net present value of this project? (Note: Do not round your intermediate calculations.) -$15,732.70 - $7,244.50 O $18,120.21 O $26,719.70 Suppose Sutherland Engineering has enough capital to find the project, and the project is not competing for funding with other projects. Should Sutherland Engineering accept or reject this project? Reject the project Accept the project